How to Buy Carnival Stock in 2021
Are you interested in buying Carnival stock? If you want to open a trading position, you need to have a deeper look into the company’s overview and performance to determine its investment potential. This article covers everything you need to know if you want to buy Carnival stocks!
Learn How to Buy Carnival Stocks in 3 Easy Steps
Find a Broker
The first thing you need to do to trade Carnival stocks is open a trading account with a well-regulated broker. Find an online broker that provides an online platform with easy access to Carnival’s shares and other stocks. When you register, your application will have to undergo a verification process. Brokers need these details from you because they must comply with laws and regulations.
Analyse a Carnival Chart
Once you access the trading platform, you will have access to numerous charts and other analysis tools. You should analyse Carnival’s charts to identify price movements, trends, and decide the right timing for your investment. If you are a beginner trader, you may want to choose a platform that provides a user-friendly interface, so you can easily interpret all charts and figures.
Once you make a decision, all you need to do is open the trading position. You can do so as soon as your account is verified and funded. Investors should also be informed regarding the broker’s commissions, fees, and other charges associated with trading, withdrawals, deposits, and others. You can find out more about these additional costs by checking the terms and conditions.
Carnival Company Overview
Corporation is the world's largest cruise line operator with a fleet of over 100 vessels across nine different cruise line brands. With such a large offering, it’s important to find out more about its business model, how it generates value for its stockholders, and more.
Carnival Business Model and Revenue Streams
The company's headquarters are in Miami, Florida, and its CEO is Arnold W. Donald. Carnival Corporation is the world's largest cruise operator with a fleet of over 100 vessels across nine different cruise line brands. It sells cruises through travel agents and tour operators primarily for the North American, Australian, European, and Asian markets. The company serves tens of millions of passengers annually.
Carnival generates revenue primarily from ticket sales of its portfolio of cruise line brands, namely Carnival Cruise Line, Princess Cruises, Holland America Line, P&O Cruises (Australia), Seabourn, Costa Cruises, AIDA Cruises, P&O Cruises (UK), and Cunard.
The company generates about 62% of its total revenue from ticket sales. The remaining 38% is derived from onboard purchases, like beverage sales, internet, casino gaming, spas, shore excursions, specialty restaurants, retail, and photo sales.
History of Carnival
Carnival was founded in 1972 by Israeli-American entrepreneur Micky Arison. The company grew steadily until it announced and completed its initial public offering for $400 million on the New York Stock Exchange in 1987.
This capital helped the company pursue several acquisitions, such as Holland America Line, Windstar Cruises, Westours, Seabourn Cruise Line, Costa Cruises, and Cunard Line between 1989 and 1999.
In 2000, Carnival Corporation joined forces with P&O Princess Cruises, including Princess Cruises, P&O Cruises, AIDA Cruises, P&O Cruises Australia, and tour operator Princess Tours. In 2003, following Carnival's acquisition of P&O Princess Cruises plc, the two companies merged into one entity.
In 2009, the company opened its Simulator Maritime Training (CSMART) in Almere, Netherlands. CSMART is a maritime training center that offers advanced simulator equipment, technology, and instructional tools.
Carnival, along with the China Investment Corporation and the China Shipbuilding Corporation, entered into a joint venture in 2015 to form CSSC Carnival Cruise Shipping, a cruise line that was scheduled to begin operations in 2019.
In 2018, Carnival announced the acquisition of the narrow-gauge railroad White Pass and Yukon Route from TWC Enterprises limited for $290 million.
After years of reporting billions of dollars in net income, the company faced its first cataclysmic year with over $10 billion in losses. As a result, its stock price declined by approximately 57% in 2020.
Brokers That Offer Carnival Shares
To help you choose the right broker for your needs, we've reviewed several brands and narrowed down our top choices to the list below. These brokers have the best support and trading tools to help you make the best out of your trading experience.
Should I Invest in Carnival Stock
If you want to find out whether Carnival suits your investment strategy, explore the following sections. These cover its investment potential, how much you should invest, and more.
Carnival Stock Investment Potential
Carnival's stock has made a gradual effort to erase its March 2020 losses. Its share price has already appreciated by at least 269% from its steep dive between March and April. Yet, it still has a long way to go to reach pre-2020 prices.
Carnival's peak price was in 2018 when it reached $72.70 per share. Before 2020, the stock grew at a moderate 4.73% annually. Given its pre-pandemic growth, many specialists believe its performance will stabilize once again in the near future. The company may be suitable for your portfolio if you want to invest in this industry, especially given Carnival’s leading market position.
What Kinds of Investors Should Include Carnival in Their Portfolios?
Carnival is a company with relatively steady growth. From 2000 to 2019, its net margin was under 10% only in 2012, 2013, and 2014. It is also a regular dividend payer, and before it halted payments in 2020, Carnival shareholders received $0.50 a share each quarter in 2019. And, as mentioned, its stock has been appreciating at a modest pace before the pandemic.
Therefore, the inclusion of Carnival in an investor's portfolio signifies a bet on the company's ability to generate the same steady growth. Some of the main risks include how the company will navigate 2021 with its fleet of vessels without being allowed to reach full capacity and how it plans to manage its long-term debt that exploded to $23.4 billion last year. Finally, its cost-reduction measures should also be examined more closely.
How Much Should I Invest in Carnival
As with any investment, the amount you choose to invest will depend on your abilities. You should set a budget for an initial purchase.
Still, what you can consider that is of great consequence is your risk tolerance. It's always a good rule of thumb to use risk capital. The reason is to be prepared in case things don't go as planned. You should also use diversification techniques that help to balance your portfolio’s risk.
How to Buy Shares in Carnival Stock?
There are two main methods that will be discussed in this section: brokers and the Direct Stock Purchase Plan (DSPP). Brokers are intermediary firms that offer you access to the financial market; in return, you have to cover different fees for their services.
One other way to purchase shares is through a Direct Stock Purchase Plan or DSPP. This method doesn't require you to open an account with a broker because you'll buy the stocks straight from the company.
Buy Carnival Shares Using a Broker
You need a brokerage account to start trading Carnival shares. This process will require you to fill out an online application form to create an account on the broker's trading platform. You may also need to submit supporting documents so brokers can verify your account. This process may take a few business days.
Keep in mind that brokers may require you to disclose information about your annual income and net worth. They may even ask you to provide your investment objectives, risk tolerance, employment status, and occupation. This is essential for them to adhere to various rules and regulations, including anti-money laundering policies, anti-terrorist financing requirements, tax laws, and record-keeping procedures.
After your account is approved, your broker will notify and instruct you to proceed with the next phase of the process: funding. Brokers typically offer these methods: electronic bank deposits, wire transfers, check, and account transfers.
If you're in a hurry to trade, the quickest funding option is electronic bank deposits, which take just a few minutes. If you don't mind the time, the other options may need a minimum of 24 hours to process your request. Lastly, when your deposit shows up in your trading balance, you can place your first Carnival trade via a market order, or a limit order.
Buy Carnival Shares With a Direct Stock Purchase Plan (DSPP)
Carnival offers a Dividend Reinvestment Plan or DRIP, which is essentially the same as DSPP. The only difference is that cash dividends you receive are invested into new shares of Carnival automatically. In this case, there will be a third party helping you purchase your shares directly from the company.
This offers an advantage in terms of fee reduction since you'll no longer have to pay a commission per trade. However, the downside of using a DSPP is that you have to pay an initial setup fee and shell out the company's initial investment amount. There is also a maximum amount that you can buy, and any subsequent purchase would still be made through a broker.
Frequently Asked Questions
Carnival may be a great stock to buy in 2021. Given the share price decrease due to the pandemic, investors have the opportunity to capture share prices at depressed levels. If you believe the company will bounce back to its pre-2020 share price, this could be a unique opportunity to capitalize on this stock.
Prior to 2020, Carnival Corporation & PLC was a consistently profitable company. The pandemic-related lockdowns and travel restrictions negatively impacted the company's business. However, given its leading position on the market, it may be one of the main firms to recover.
Carnival has sufficient daily volatility and trading volume to allow short-term trading profits. At the same time, its huge potential makes it ideal for long-term strategies.
The platform best for trading Carnival stock should offer a wide range of technical analysis tools to picture its stock price movements. This may depend on your knowledge and analysis abilities.
Carnival can be traded on NYSE from 9:30 A.M. to 4:00 P.M. (EST) and London market trading hours, from 3 A.M. to 11 A.M (EST).
Carnival is listed on the New York Stock Exchange (NYSE) and London Stock Exchange (LSE).